ACCC approves Qantas-Emirates air alliance

The competition watchdog has given approval for Qantas to go ahead with its proposed airline alliance with Emirates.

The authorisation has been granted by the Australian Competition and Consumer Commission with one condition, related to flights between Australia and New Zealand.

The two airlines must maintain their current number of weekly flights across the Tasman.

ACCC chairman Rod Sims says the Qantas alliance with the Middle Eastern carrier is likely to benefit the public.

"The ACCC considers that the alliance is likely to result in public benefits through enhanced products and services offered by the airlines, and improved operating efficiency," Mr Sims said.

"In particular, the alliance is likely to provide Qantas and Emirates customers with increased access to a large number of existing frequencies and destinations under a single airline code, improved connectivity and scheduling, and access to each alliance partner's frequent flyer programs.

"Taking all of this together, the ACCC is satisfied that the alliance is likely to result in material, but not substantial, public benefits."

The ACCC gave draft approval for the Qantas-Emirates alliance in December, ahead of this morning's final decision.

The approval has been granted for five years, until March 2018, not the 10 years the airlines had been seeking.

Under the alliance Qantas is shifting its stop-off point for European-bound flights from Singapore to Dubai, where Emirates is based.

From Dubai passengers will be able to connect with direct Emirates flights servicing 65 destinations in Europe, North Africa and the Middle East.

Qantas and Emirates can now co-ordinate maintenance and crew training as well as combining their purchasing power when buying goods including fuel.

The first flight under the deal, from Sydney to London via Dubai, will leave on Sunday.

Qantas and Emirates have issued a joint statement on the decision, with Qantas chief executive Alan Joyce saying that bookings have already increased.

"Qantas is an Australian icon and the future of its international business is much brighter with this partnership," Mr Joyce said.

But Mr Sims does not accept that the alliance was needed to ensure Qantas remained viable as an international carrier.

"The ACCC does not accept or rely on the claim that Qantas International is in 'terminal decline' and unable to compete effectively or operate profitably absent the alliance," he said.